Cohesion policies: place based approach

Cohesion policy: a controversial issue Cohesion policy is an highly controversial issue Who pays for cohesion policy? Is cohesion policy really useful? Why should Europe be involved in cohesion policy?

The place-based approach The Barca report and the place-based approach What is a place within the framework of a place-based policy

What is a place Place can be defined as a contiguous area within whose boundaries a set of conditions conducive to development apply more than they do across boundaries: natural and cultural circumstances and the preferences of people are more homogeneous or complementary, the knowledge of people is more synergic and positive externalities and informal and formal institutions are more likely to arise.

The two objectives of cohesion policy The two objectives of the cohesion policy: efficiency and equity Potential trade-offs between these two objectives Optimal policies to pursue efficiency may not be optimal policies to pursue equity and vice-versa

The two objectives of cohesion policy These two objectives must then be pursued through different measures

Definition of a place-based policy A place-based development policy can therefore be defined as – -a long term development strategy whose objective is to reduce persistent inefficiency and inequality in specific places

Definition of a place-based policy – through the production of bundles of integrated place tailored public goods and services designed and implemented by eliciting and aggregating local preferences and knowledge through participatory political institutions and by establishing linkages with other places – promoted from outside the place by a system of multilevel governance where grants subjects to conditionalities on both objectives and institutions are transferred from higher to lower levels of government.

Efficiency The main objective of cohesion policy is efficiency All regions have, to a greater or lesser extent, underutilized resources Efficiency means full utilization of existing endogenous immobile resources but also expansion of these resources exploiting all the possibilities of attracting mobile resources over time within a framework of sustainable development.

Efficiency The primary goal of cohesion policy is the enhancing of these underutilized economic resources Cohesion policy is a development policy and not a redistributive policy Convergence is not the primary goal of cohesion policies

Cohesion policies as exogenous policies Cohesion policies must be exogenous policies Two crucial reasons for that: – To avoid the risks of capture of local elites – To break path dependency

Cohesion polices must be place-based Cohesion policies must be place-based This means that a) these policies must be designed to suit specific territories and b) that local actors must have a leading role in their elaboration and implementation

Cohesion polices must be place-based Policies must be designed to suit specific territories because people needs and institutions are different People needs and preferences depend on the local context Policies must take fully account of these territorial differences

Cohesion polices must be place-based The effectiveness of institutions depend as well on the local context Institutions for economic development must be tailored to suit territorial specificities Policies aimed at creating and strengthening local institutions must therefore take into account the special features of each territory.

Cohesion polices must be place-based Cohesion policies must be place-based because local actors have a better knowledge of their territory. Local people is then in the best position to elaborate and implement policies at territorial level

Deliberative decision making processes Local knowledge is not readily available. It is fragmented in a variety of individuals and bodies. It must be extracted, socialized and increased through deliberative decision making processes An exogenous intervention may be necessary to convince local people to share information and knowledge.

Local and external knowledge Local knowledge does not exhaust all knowledge is needed. It is important to have access to information and knowledge, wherever it can be found Access to outside knowledge is particularly important for fostering innovation and technical progress

Focus on public goods The main goal of cohesion policies is to provide bundles of integrated public goods – Public goods increase productivity of firms, specially of small firms – Public goods improve people standard of living – Public goods favour people participation in the local decision making processes

Focus on public goods Cohesion policy is a territorial policy and not a sectorial policy This makes possible to implement integrated programmes Integration makes possible the exploitation of synergies between complementary interventions

Model of governance A proper design of the model of governance is a necessary condition for the success of cohesion policies The proper model of governance for cohesion policies is multi-level governance

Multilevel governance This is a system by which the responsibility for policy design and implementation is distributed between different levels of governments and special purposes local institutions In multilevel governance there is not a division of responsibilities by sector of intervention but a division of tasks

Multilevel governance Different institutions and local agencies cooperate to reach the same aims and implement the same policies but with different tasks

Multilevel governance In multi-level governance, the top levels of government have responsibility for setting priorities and general objective and the contractual framework for the lower levels; selecting projects and allocating funds to places and providing linkages between them; promoting institutional building and learning and monitoring results and providing technical support and expertise

Multilevel governance The lower levels have the responsibility of eliciting and aggregating the knowledge and preferences of citizens; designing projects and appraising them for financing and implementing projects and managing learning processes.

Conditionalities Relations between different levels of government take a contractual form Commitments, conditionality, monitoring and evaluation are necessary ingredients of this policy

Decision making at local level The decision making processes at local level should exhibit the following ideal features: – To convince local people to share common information and knowledge in order to achieve common goals; – to be highly inclusive promoting the participation of all those interested in the results of the policy; – to clearly identify objectives and targets of each measure – to favour a learning process adopting an experimental approach through continuous debate and monitoring